PokerStars to SNE Players: “Hey You Kids; Get Off My Lawn!”

Earlier this week I used a boxing analogy to make sense out of the ebb and flow of the war being waged between PokerStars and some in the poker community over changes to the site’s VIP Program. In my analogy I stated my belief that the players had overplayed their hand (to mix metaphors) and walked into a buzz saw promotion that led to a 33% rise in peak cash-game traffic, and nearly a complete victory by PokerStars.

The lack of impact from the boycott seems to have solidified PokerStars resolve. Whereas before the boycott players were making a strong theoretical case, once the boycott began their theory was put to the test, and the results weren’t good.

In the announcement, Eric Hollreiser, the Vice President of Corporate Communications for Amaya Inc. said, “The recent three-day boycott by some players that disagree with our announced VIP changes did not have a significant impact on PokerStars, as traffic actually spiked through the period as a result of the start of our long-planned holiday promotion.”

And because the boycott didn’t have a significant impact, the players who took part in it seemed to have only validated PokerStars’ new strategy. Interestingly, several people, including Daniel Negreanu (as well as myself, here and here), opined that the boycott could very likely have this type of confirming effect, even if it was mildly successful.

It wasn’t difficult to predict. The fact that the player set a three day timetable shows they need PokerStars more than PokerStars needs them.

Furthermore, even if traffic dipped 5%, it would still prove to PokerStars that even if every single frustrated player left, the site would be in excellent shape – and the chances of every single disillusioned player leaving is close to 0%. With nowhere else to go, 90% or more would likely find themselves back at the PokerStars tables in short order.

Basically, there was little real upside to the boycott, as PokerStars wasn’t going to cave on all of the player demands, especially knowing the boycotters couldn’t continue to strike in perpetuity. On the flip side, there was a whole lot that could, and did, go wrong, as the players lost what little bargaining power they may have had. They put all their capital into the boycott, and now, based on the statement by Amaya and the blog post by Daniel Negreanu, it appears they are unlikely to get any type of reprieve from PokerStars.
Before I continue, I want to state that I personally continue to believe PokerStars should concede on one point, and remove the 45% cap on Supernova Elite benefits in 2016 for players who achieved the status in 2015.

The two-way street

Is it a bit flippant and contemptuous? Probably. But I’d also point out that the rift between the affected players and PokerStars has grown quite adversarial, and is starting to look as if it’s irresolvable.

This rift started to form soon after the announced changes in early November, as the players went on the attack almost immediately, casting aspersions on PokerStars motivations, and refused to accept the validity of any alternative viewpoint or explanation.

These players use data to formulate strategies and exploit their opponents, but for whatever reason they dismissed PokerStars internal data as meaningless. Even the macro data I’m able to collect pales in comparison to the micro data PokerStars has to work with. This led to players mocking PokerStars executives as inept businessmen, and a lot of mud was flung in the direction of Amaya. In my opinion this caused PokerStars to shift from being apathetic to their plight to full on contempt for some of these players.

At the very least, the players should have been more respectful and given PokerStars a chance to have a dialogue and explain the changes before calling the company’s integrity into question. Instead their dismissive attitudes set the stage for a fight that may not have needed to occur – or perhaps, maybe it did – and now PokerStars seems to be coyly returning the favor.

For instance, following the announcement that the changes would remain, Phil Galfond said the following on Twitter, “You’d think a communications expert at a multibillion $ company would be able to hide his contempt for the customers.” This is true, but I would ask; what about the reverse? Didn’t the poker players rallying against the changes show the same level of contempt (or more) for PokerStars?

Weren’t these players telling PokerStars, and anyone that would listen that the company was liars and thieves who had no intention of reallocating the money to other promotions, and were merely making a cash grab?

Weren’t these players telling PokerStars they didn’t know how to run their business, and that poker players knew better than the site how to strengthen the ecosystem?

In the end, I think the gloating people are perceiving in the most recent announcement is a byproduct of two things: One, they are distraught about the boycott’s failed impact and expect PokerStars to rub salt in their wounds, and 2) PokerStars is in fact taking a bit of a victory lap.

Can there be an agreeable resolution?

At the time the boycott was gaining momentum I made the point that there was a lot of room between doing nothing and mounting a boycott. I feel like the chance to have a dialogue was tossed aside far too soon, and with growing contempt on both sides, culminating with the boycott, this relationship may now be strained beyond the breaking point. It will be far more difficult for the two sides to reach any type of agreement now – assuming PokerStars was ever willing to concede on any of the changes in the first place, which depends on your point of view. There are several theories making the rounds as to why PokerStars is making these changes, and why they now seem to be unbending when it comes to some of the more contentious policies.

One theory says they need to raise money to pay off the massive debts Amaya has after spending nearly $5 billion to acquire PokerStars and its assets.

@SteveRuddock mine too until someone started talking about how this specific thing could be related to all that bank/PE debt

And a final theory, which I’ve ascribed to and still have some hope that it can come to fruition even after PokerStars most recent announcement, says PokerStars will eventually cede ground on some of the changes as a way of extending the proverbial olive branch to these players.

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